x Abu Dhabi, UAEWednesday 24 January 2018

Ecuador finds way for conservation to pay in protecting rainforest

The Life: The Yasuní nature reserve in Ecuador is a stunning display of natural beauty. It could stay that way thanks to a trust fund that pays the country to leave the rainforest's oil reserves untapped.

Deep in the Amazon, hidden by the steamy vegetation and the fertile soil of the rainforest, lies one of the greatest treasures.

The Yasuní nature reserve in Ecuador is a stunning display of natural beauty. Located at the intersection of the Andes mountains and the Equator, it has for centuries been insulated from climate change, allowing an unusual amount of species to thrive. As a result, the protected area offers an unrivalled biodiversity.

"The last place in the Amazon that is still virgin forest is the Yasuní. There is more variety in flora and fauna in one hectare than in the US, Canada and Mexico together," says Ivonne A-Baki, Ecuadorian secretary of state.

More to the point, the reserve sits on top of thousands of barrels of oil, the main source of income for the country.

This has put the government in a quandary. It desperately needs petrodollars to keep its economy on track, but its commitment to environmentalism is so strong that nature's right of existence is enshrined in the country's constitution.

"Ecuador is a small and developing country that still depends on oil," says Mrs A-Baki. "Still, we believe in conservation."

This is perhaps unsurprising for a country whose territory includes the renowned Galápagos Islands, the natural diversity of which inspired Charles Darwin to revolutionise scientific thought.

Ecuador is aware of its beauty, and its 44 protected areas are testament to the will to preserve it.

Confronted with the tricky task of aligning economic development with conservation, the government managed to come up with a creative solution.

Taking a leaf out of conventional climate change mitigation efforts, in which rich countries buy the right to pollute by paying poorer countries to offset their emissions, Ecuador and the United Nations Development Programme have created a trust fund that pays the country to leave Yasuní's oil reserves untapped, saving the area from destruction. Funds flowing to developing countries under carbon emission trading mechanisms finance reforestation, but cutting down Yasuní's ancient forests to get such funding would defeat the objective, and new thinking had to be deployed.

"It's the only project in the world for prevention. Not for remediation or mitigation, but prevention. It's a completely new concept," says Mrs A-Baki.

Ecuador and the UN hope to raise a total of US$3.6 billion (Dh13.22bn) over the next 15 years, she adds.

So far, the fund has raised about $250 million from a range of donors including both governments and companies. Italy, Spain and Germany have made donations, as have Unilever and Coca-Cola. For them, Yasuní is a good opportunity to practice some corporate social responsibility.

To encourage donations, the investments made with the trust fund are governed by strict rules. The government is only allowed to spend trust money on building alternative energy sources, on conservation, reforestation efforts elsewhere in the country, and on social development of the indigenous tribes populating the rain forest.

Two of those tribes live in Yasuní, where they have opted to eschew modern life in favour of voluntary isolation.

If the fund's money is spent outside of those guidelines, it becomes public debt, and donors are issued a certificate of return for their donations. Similarly, should the government decide to exploit Yasuní's oil, donations would turn into debt.

Much of the funding will flow into renewable energy, as Equador is aiming to ween its electricity sector off fossil fuels over the next two decades. Solar, hydroelectric and geothermal sources will all be tapped, says Mrs A-Baki.

The Galápagos Islands will be converted first, and become entirely reliant on alternative energies by 2016.

Other countries have taken note of the Yasuní initiative, she says."It's a good example for countries which have high biodiversity to follow."

Given its aim to preserve nature, the concept's appeal is limited to countries with a lot to lose from extracting commodities.

In the arid Arabian Gulf, for instance, it would not pay to leave hydrocarbon reservoirs untapped. But Mrs A-Baki believes there are 10 to 12 countries for which a similar initiative would make sense.